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Artificial intelligence and talent determine our future

Worries have been mounting in the world of investors about the records being made on international financial markets. Concerned about a stock market bubble on the verge of bursting, these investors are looking for the signs that would point in this direction. Analysts have yet to see any however, and are sending a reassuring message that in most countries, including those in Europe, the economies are flourishing and there are no signs yet that would indicate any downturns are imminent.

Even the economic think-tanks consider the prospects to be bright. The International Monetary Fund (IMF) recently praised the EU’s economic performance, and with a growth rate in excess of 3%, the Netherlands is one of the frontrunners. This is bad news for the protest parties trying to win voters over with the promise that, if elected, these parties will dismantle the EU. According to a recent survey, an average of 78% of European citizens are happy to be living in the EU.

Does this mean that there aren’t any doomsayers? They are definitely out there, and they warn of realistic risks that could lead to a tipping point in the global economy such as current events in the U.S. and China (mountain of debt), the political tensions surrounding North Korea, the future of the EU and Brexit. For now, there are still reasons for optimism. However, it is always wise for policymakers and businesses to be prepared for bad economic times which not only strike when least expected, but can do so quickly. So, what can they do?

Winners

According to forecasts, companies and government organizations that are making substantial investments in innovative technologies and talent will emerge as the winners, in good or bad economic times. It is also worth mentioning that without these technologies, we will not be able to slow down climate change. Occupying the prime position worldwide when it comes to the application of innovations is artificial intelligence (AI). This technology involves machines, software and equipment that are able to imitate human intellectual capacity, making them capable of learning on their own and making decisions. They can even learn from their own mistakes, yielding better performance as a result. In practice, this process is known as machine learning. Well-known examples of AI include apps on smartphones such as the virtual assistants Siri, Google Now, Facebook M and Cortana. Other applications include chatbots, virtual conversation partners that are used to provide customer service on websites. One example of this in the Netherlands is the chatbot Billie on bol.com. AI is also used for robots, video games, translation machines, image recognition and driverless cars. Data such as customer information plays an essential role in AI. We are currently seeing rapid advances being made with AI and data at large international companies. All of the companies doing this become “big-data companies”. These innovations allow companies to secure tremendous positions of power, and to control markets in a variety of areas.

Artificial intelligence offers unprecedented advantages in countless fields, such as health care and education (higher quality, efficiency), climate policy, fighting crime (including cybercrime) and traffic safety. Since we do not know what intelligent computer systems will be capable of in the future, in addition to the advantages, it is also necessary to pay close attention to the ethical and legal issues that we will be facing.

Catching up

Governments and SMEs are still far behind, and the Netherlands is no exception. Since we are a country with an open economy that gets most of its income from export abroad, we will have to catch up. This will also be necessary to avoid getting dominated by the super-rich American tech giants that are already ruling the roost when it comes to internet in Europe.

Doomsayers believe that as a small country, the Netherlands doesn’t stand much of a chance against this overabundance of money and knowledge. We see this differently. The Netherlands is in the top ten of most of the economic and other world rankings, and is even in the top four when it comes to innovations. According to the annual IMD World Talent Ranking list published this week, our country is number six worldwide in recruiting, developing and retaining talent. Countries like Germany (8th place), the US (16th), the UK (21st) and France (27th) are trailing behind the Netherlands.

One positive development is that we are also seeing an increasing number of startups and scale-ups that are focusing on new technological developments in the Netherlands. It is mainly the rise of the scale-ups that we must encourage and continue to promote. These are companies with at least ten employees that grow 20% per year or more during the first three years. According to a recent study, this success is counterbalanced by a worrisome development. More and more established companies are experiencing negligible if any growth, and one-third are even shrinking. The group of companies in the SME sector that are stable or shrinking already constitutes 80% of the total. The growth of our economy and the creation of jobs are increasingly dependent on startups and particularly scale-ups as a result.

Boost needed in The Netherlands

Since we are involved in the world of tech startups and scale-ups by virtue of our work, we have observed that policy has improved in the Netherlands in recent years. Examples include the arrival of StartupDelta, but also the rapid growth of the Brightlands Smart Services Campus in Heerlen, where talented startups focus on artificial intelligence, blockchain and climate change. The third Rutte government can give this tech world a further boost by promoting growth capital, digitization, cutting back on bureaucratic red tape, lowering employer contributions and by implementing fiscal simplification measures. The encouragement of creative hubs, such as the one in London’s East End, also works well.

In addition, it is necessary to convince educational institutions to develop programs that focus on the smart industry and entrepreneurship. These areas are also extremely important for established companies. Without the use of new technologies, these companies will not be able to survive in the new economy, also known as “4.0”.

Willem Vermeend and Rick van der Ploeg
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